LO 4.2.4: Calculate either PV, FV, N, I/YR, or PMT involving both a single sum and annuity payment.

Question 1

What is the initial deposit of a Single Sum with Annuity Payments problem considered

Answer 1

The initial deposit is treated as a single sum (PV)

Question 2

How is a single sum and annuity payment calculated

Answer 2

• PV is the initial deposit (negative #)
• PMT is the annuity- series of regular and equal payments, cf. 4.1.2/p. 137 (negative #)
• N is the number of periods this payment is applied
• I/YR is the interest rate that the investment is earning (END mode to include interest)
• Solve for FV, or any of the other variables if FV is given, etc.
• Combined single sum/annuity problems examples on p. 151-155